Wealth management at local banks is often maligned, but Louisville's Stock Yards Bank & Trust has become a major player - with regional expansion plans.

Local banks are often accused of just not getting wealth management, of being too sleepy and stuck in their ways to be truly competitive.

Not Louisville-based Stock Yards Bank & Trust.

The bank’s wealth management division has been a major player in its hometown with $1.6 billion in assets under management, and this year it is planting a stake in two new markets, Cincinnati and Indianapolis.

SYBT hired John Posey away from Key Bank to be its wealth management director in Cincinnati last month and is currently looking for an executive to head its new Indianapolis office, said Kathy Thompson, senior executive vice president of the bank’s wealth management group.

“These are good markets for us,” Thompson said. “We’re looking for advisors and plan to build one client at a time, using the model we’ve built here.”

That model has been very successful indeed, according to Jeff Davis, banking analyst for Guggenheim Partners.

 “SYBT’s wealth management division is very good at what they do,” Davis said. “They consistently deliver 15 per cent to 20 per cent of the bank’s net income, they’re well-known in the community and have a very talented team that is able to go out and sell.”

Thompson’s investment performance record, according to Davis, has been a critical factor.

“She has great performance numbers, which makes it easier for her to go into the community and sell,” he said. “You can’t get away from talent in this business.”

Thompson’s boss, SYB T chairman and chief executive David Heintzman, credits Thompson with creating a “true sales environment,” not usually found at a bank.

“At other banks there’s more of a caretaker mentality, but Kathy is a rainmaker who goes out and hustles business,” Heintzman said.

The bank’s aggressive marketing strategy is a prime example, Thompson said.

SYBT’s wealth management division advertises on billboards, sponsors shows on National Public Radio that appeal to upscale audiences and sends direct mail to existing  bank clients who are potential wealth management  customers.

It also practices a high-touch approach with clients, potential clients and centers of influence in the community, inviting them to wine tastings and luxury suites at baseball games and the Kentucky Derby.

And every Christmas season, SYBT takes its best customers on an all-day shopping trip, serving them drinks and food along the way.

“The busy professional women love it because they get their shopping done in one day,” Thompson said.

The average client has approximately $1.7 million in assets, she said, and the bank sees its “sweet spot” as clients with between $1 million and $5 million in investible assets.

And while the business has steadily grown organically, without using acquisitions, banks still face an image problem in wealth management, Thompson maintained.

 “People still think trust companies are not as progressive in investment offerings and that independent advisors and brokers are more knowledgeable, which is not true,” Thompson said.

In addition to touting the bank’s in-house investment team of stock pickers and an open-architecture platform, Thompson believes the bank needs to emphasize its status as a fiduciary in a highly-regulated industry.

And, of course, it can also lend clients money.

Davis believes SYBT’s local status and grass roots approach has enabled it to capitalize on the troubles of better-known national competitors.

Thompson agreed.

“A lot of our business has come from big banks,” she said. “We’ve gotten opportunities over the last year and a half that we never would have had otherwise.”